Trick or Treat: Key Elements to Negotiation

Étiquettes : , , ,

The power of persuasion is commonly undervalued. Some just don’t know how to properly prepare and initiate the negotiation process. For this reason, we decided to discuss the key elements preliminary for successful negotiation outcomes. Some of these elements are more obvious than others, but it doesn’t mean they can be dismissed.

To prepare yourself for upcoming negotiations, you must make sure to cover the following:

You understand what you want – sometimes we think we know what we want, but the idea is simply not structured or thought out properly. The primary questions to ask yourself are where you want to get and why. Our objectives will give us direction, and our expectation will give us strength for negotiation. As President Lyndon Johnson once said: “what convinces is the conviction”.

You are prepared – success is 99% preparation. If you are not prepared for negotiations, it’s the same as preparing to fail. Information is key for preparation, and the one most informed will have the upper-hand in negotiations. Analyze what are you buyer’s incentives for the acquisition, what are their restrictions, do they have a history of previous acquisitions? What are the possible synergies and value added from this transaction? These questions must be answered if you want to be prepared.

Establish a zone of possible agreement (ZOPA) – this way you can reflect on “what you want to get” and “what is not acceptable for you”, to be aware at what point you will withdraw and where to draw the line.

Establish a clear concession strategy – this will allow you to structure the points you are willing to negotiate and to what extent.

Perform a thorough valuation – one of the most vital processes preliminary to the negotiations stage, because it will essentially portray what price range to expect from the deal. The valuation will outline any synergies that might exist between your company and the buyer’s company, and the more thorough and detailed the analysis, the more insight you will receive about the competitive position of the buyer, his economies of scale and the true savings produced as a result of the deal – giving you more room and power during negotiations in the end.

Negotiations can be tedious, require fast thinking and of course experience. Here at ONEtoONE, we consider every aspect and intricacy of the everchanging market environment in our valuation process and are known for our unique methodology for providing the best value for your business. If you want to learn more about what we do and our methodology, please visit our corporate website or contact us via this form. In case you wish to learn more about the ways you can maximize the value of your company today, read our free e-book! It’s free.

 

READ MORE

DOWNLOAD OUR E-BOOK

 

 

Artículos relacionados


Valuation using Comparable Transactions Method This week’s spotlight takes one of the most practical and straightforward alternative valuation methods to the known method of discount free cash flows. It’s called the comparable transactions method. Meanwhile, the discount free cash flow method ana...
Inspecting Management Buyouts In the center of this week’s discussion are management buyouts. What are they? Management buyouts (MBO) are a transactional process whereby a company’s management team purchases the assets and operations of the business they manage. An MBO proposes a...
Value, Worth, and Company Sale Strategy An obvious objective for the seller of a company is to maximize the company’s sale price. While securing the highest price possible in an M&A deal requires the alignment of many different factors, such as market conditions, sale timing and of cou...

Il n'y a pas encore de commentaires

Écrire un commentaire

Partager cet:

Les plus populaires

Abonnez-vous à notre Newsletter:

Les plus populaires:

Now is the Time to Sell Your Business

It may have taken you a lifetime or even generations to create substantial value in your business, but with the right planning and advice it may take only a year or two to double that value. Succession issues, retirement, technology, globalism, scale, etc. are all viable reasons to be thinking about selling your business. But […]